Citation Nr: 1500608
Decision Date: 01/07/15 Archive Date: 01/13/15
DOCKET NO. 12-11 412A ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in St. Paul, Minnesota
THE ISSUE
Entitlement to waiver of overpayment of nonservice-connected pension benefits in the amount of $9,801.50.
[The issue of entitlement to service connection for an acquired psychiatric disorder other than posttraumatic stress disorder (PTSD), to include depression and anxiety, is the subject of a separate decision.]
REPRESENTATION
Appellant represented by: Vietnam Veterans of America
ATTORNEY FOR THE BOARD
D. Van Wambeke, Counsel
INTRODUCTION
The Veteran served on active duty training in the Army National Guard from May 1997 to September 1997 and on active duty in the Army Reserve from February 2003 to May 2003.
This matter comes to the Board of Veterans' Appeals (Board) on appeal from an August 2012 decision by the RO's Committee on Waivers and Compromises (Committee) at the Department of Veterans Affairs (VA) Regional Office (RO) in St. Paul, Minnesota. By that decision, the Committee denied a waiver of recovery of an overpayment of nonservice-connected pension benefits.
The Veteran requested a hearing before the Board in his November 2012 VA Form 9. In a January 2013 VA Form 21-0820, it was noted that the Veteran was incarcerated and that he would not be transported to the RO for a Board videoconference hearing. The Board notes that it appears from a contemporaneous search of the Minnesota Department of Corrections that the Veteran was released from incarceration on December [redacted], 2013, and that his current status is that of wanted fugitive since June [redacted], 2014. Given that it is unlikely the Veteran would appear for a Board hearing due to his fugitive status, the Board will proceed without affording the Veteran his requested hearing.
The current record before the Board consists of paper claims files and an electronic file known as Virtual VA.
FINDING OF FACT
VA's fault in the creation of the debt in question is so significant as to outweigh the other factors in the case.
CONCLUSION OF LAW
The criteria for waiver of recovery of an overpayment of nonservice-connected pension benefits in the amount of $9,801.50 have been met. 38 U.S.C.A. § 5302 (West 2002); 38 C.F.R. §§ 1.956, 1.962, 1.963, 1.965 (2014).
REASONS AND BASES FOR FINDING AND CONCLUSION
The Veteran was granted nonservice-connected pension benefits in a July 2010 rating decision, effective September 2, 2009. In March 2012, the RO informed the Veteran that it had received notice from the St. Cloud State Prison that he had been incarcerated for more than 60 days following conviction of a felony or misdemeanor. It was noted that, by statute, VA was required to terminate benefits beginning the 61st day of incarceration following conviction and that the RO proposed to terminate the Veteran's benefits effective November [redacted], 2011. The RO also informed the Veteran that the termination of his benefits would result in an overpayment of benefits paid to him. See March 2012 letter located in Virtual VA. In June 2012, the VA Pension Management Center notified the Veteran that his nonservice-connected pension benefits had been stopped beginning November [redacted], 2011, which was the 61st day of his imprisonment, rather than the proposed date of November [redacted], 2011. The Veteran was also advised of his right to appeal the determination or to request a waiver. See June 2012 letter located in Virtual VA. The following month, the Veteran submitted a request for a waiver of the overpayment on a Financial Status Report (FSR). See VA Form 5655.
The Committee at the St. Paul RO found that although the debt of $9,801.50 was not created through fraud, misrepresentation, or bad faith, the Veteran was at fault in the creation of the debt on account of the fact that he did not promptly report his incarceration. The Committee concluded that the appellant realized an unjust enrichment at government expense and that no financial hardship was shown since he was incarcerated and the State was providing for his basic needs. The request for a waiver was thus denied. See VA Form 4-1837. Notice was provided in an August 2, 2012, letter.
The Veteran essentially asserts that he is entitled to a waiver because he was unaware he had to inform VA of his incarceration; he did not receive notice letters in which he was informed of his responsibility to inform VA of his incarceration; and that his girlfriend at the time had taken and cashed the checks he had received from VA during his incarceration without his authorization. See statement in support of claim received August 2012; November 2012 VA Form 9.
Recovery of an overpayment may be waived if there is no indication of fraud, misrepresentation, or bad faith, on the part of the person or the persons having an interest in obtaining the waiver, and recovery of such indebtedness would be against equity and good conscience. See 38 U.S.C.A. § 5302(c) (West 2002); 38 C.F.R. §§ 1.962, 1.963 (2014).
In the absence of fraud, misrepresentation, or bad faith, consideration may be given as to whether recovery of the overpayment would be against equity and good conscience. The standard "equity and good conscience" will be applied when the facts and circumstances in a particular case indicate a need for reasonableness and moderation in the exercise of the Government's rights. The decision reached should not be unduly favorable or adverse to either side. The phrase "equity and good conscience" means arriving at a fair decision between the obligor and the Government. In making this determination, consideration will be given to the following elements, which are not intended to be all-inclusive: (1) the fault of the debtor, (2) balancing of faults between the debtor and the VA, (3) undue hardship of collection on the debtor, (4) whether collection would defeat the purpose of an existing benefit, (5) whether failure to collect a debt would result in the unjust enrichment of the debtor, and (6) whether the debtor changed positions to his or her detriment in reliance upon a granted VA benefit. 38 U.S.C.A. § 5302 (West 2002); 38 C.F.R. § 1.965(a) (2014); see Ridings v. Brown, 6 Vet. App. 544, 546 (1994).
The Board has reviewed the Veteran's entire record. It found a September 26, 2011, mental health social worker note in which it was noted that the writer met the Veteran in the Minnesota Correctional Facility-St. Cloud for a 30 minute group on VA services followed by a 15 minute individual case management visit. It was further noted that the Veteran had updated the Veterans Benefits Administration (VBA) on his felony conviction and subsequent incarceration so he does not receive an overpayment of his benefits. Given this record, it appears that the Committee was incorrect in finding the Veteran was at fault in the creation of the debt on account of the fact that he did not promptly report his incarceration since it is clearly noted in a VA treatment record that he notified VBA of his incarceration so that an overpayment would not be created. Had VBA taken the proper steps, the Veteran's pension benefits could reasonably have been stopped effective as of the 62nd day of his incarceration. Thus, in weighing the respective faults of the two parties, the Board finds sufficient fault on the part of the VA in the creation of this debt and minimal fault on the part of the Veteran such that a waiver of the overpayment may be granted.
The Board has considered the other elements comprising the standard of equity and good conscience and finds that the VA's fault in the creation of this debt far outweighs any other consideration such that discussion of the other elements is not necessary. The fact that the VA could have avoided the creation of the debt altogether, or at least substantially minimized the amount of the debt simply by performing its routine duties in a more prompt and timely manner, is so significant that other considerations are overshadowed. The Board therefore holds that the evidence supports waiver of the debt resulting from the overpayment of pension benefits when the Veteran was incarcerated.
ORDER
Waiver of the recovery of an overpayment of pension benefits in the amount of $9,801.50 is granted.
____________________________________________
KATHLEEN K. GALLAGHER
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs